>>20088145Remember those tbills are basically cash money market funds. You don't get any potential capital gains. When the interest rates eventually fall a bond fund will return its average length times each percent drop in interest rate.
Right now the entire bond market in America has an average length of 6 years. And a rate of maturity of 4.8%. If the fed drops rates and it goes down to 1.8% then you'd get 18% price increase.
This is why some people go long with long term etf bonds. That same return with EDV (extended long term) would net you 72% lol
But it goes the other way too. So if the fed fucked up inflation and we rise another 1% then EDV would drop 24%.
I'm a boglehead so I hold BNDW (world etf) but it doesn't include the emerging market. That would be VWOB from vangaurd which has a comfy 6.8% yield and
>>20088153It's hedged in US dollars. Almost all emerging market bond etfs are. Long term unhedged has just fucked investors with currency conversion costs
>>20088154It does yes. We're starting to see that America is issuing so much debt that 1) its actually flooding the supply, which decreases demand and price, and is causing US yields to rise. There's just so much fucking debt that we're pushing up yields. Also 2) investors are getting nervous about it and starting to demand higher yields to compensate. Which is a MASSIVE red flag for what should be the "riskless reserve currency" that everything is based off of. We just saw it start with the last 10Y and 30Y auction
